| Stock Ticker |
| LivePerson | 2.85 |  | 0.18 |
| Selectica | 1.16 | | 0.07 |
| ICT | 9.15 | | 0.55 |
| Interactive | 11.01 | | 0.49 |
| SupportSoft | 3.62 | | 0.14 |
| Vignette | 12.26 | | 0.45 |
| ClickSoftware | 2.46 | | 0.07 |
| Salesforce | 69.5 | | 1.88 |
| Oracle | 23.37 | | 0.62 |
| Convergys | 13.84 | | 0.34 |
| Epicor | 7.25 | | 0.16 |
| NetSuite | 16 | | 0.3 |
| Rainmaker | 3.23 | | 0.06 |
| eLoyalty | 5.59 | | 0.07 |
| ATG | 4.17 | | 0.05 |
| Teletech | 15.99 | | 0.19 |
| Nortel | 5.99 | | 0.07 |
| Amdocs | 30.86 | | 0.36 |
| RightNow | 16.71 | | 0.17 |
| Chordiant | 6.27 | | 0.06 |
| Pegasystems | 14.89 | | 0.14 |
| CDC | 3.07 | | 0.02 |
| NCR | 26.22 | | 0.08 |
| Sykes | 19.81 | | 0.06 |
| SPSS | 33.9 | | 0.09 |
| Intervoice | 8.21 | | 0.01 |
| HP | 45.47 |  | -0.04 |
| Tekelc | 16.83 | | -0.02 |
| NICE | 28.11 | | -0.36 |
| APAC | 1.47 | | -0.02 |
| SAP | 57.45 | | -0.84 |
| Astea | 3.59 | | -0.09 |
| Unica | 8.3 | | -0.42 |
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As of 4:00 p.m. on 8/7/08 |
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CRM in Financial Services: Relationship Management Goes Vertical
By Jason Rushforth, Financial Services Global Vice President for Pivotal CRM, CDC Software
Where financial matters are concerned, trust is all-important. Whether it’s daily personal finances or large corporate deals, entrusting money and transactions to a financial services firm requires a high degree of confidence in its competency and dependability.
Financial services institutions have long realized that this sort of trust is hard to obtain without a relationship. Even in retail banking—the highest-volume, lowest-complexity area of financial services—banks both big and small are striving to personalize the customer experience and build stronger relationships. In lower-touch, higher complexity area, such as asset management and investment banking, this relationship-building is not just a goal it’s a necessity for survival. No pension fund is going to trust you with the management of their multi-million-dollar investments, and no company is going to trust you with a major acquisition, if they don’t feel they have a solid relationship with your firm.
It’s hardly surprising, then, that the financial services industry has long been at the forefront of CRM adoption. Financial services firms understand the value of relationships, and they know they need technology to support the creation and retention of these client relationships. Most financial firms have CRM systems in place, and in many cases, they have been using these systems for many years. In fact, many firms that were early adopters have outgrown their CRM systems and are now looking for their next generation of CRM. And as they are doing so, many are turning to “vertical” CRM solutions—systems designed specifically for a certain industry.
Why is vertical CRM so appealing in financial services? One of the drawbacks of being an early adopter of any technology, as many of these firms were, is that you get to live through its growing pains. Many financial services firms were victims of the early age of CRM, in which initial hype faded into disappointment as some firms complained of never-ending, over-budget deployments that failed to achieve anticipated goals.
The good news is that financial services firms learned from these experiences. There were many internal pitfalls they had succumbed to: a failure to fully integrate CRM into a broader corporate strategy, inadequate attention to change management and user adoption, taking an unwieldy “big-bang” approach to CRM rather than breaking it into more manageable stages. But there were also problems with the technology: sprawling systems that had so many bells and whistles they were a nightmare to implement, inflexible infrastructures that made them difficult and time-consuming to integrate and adapt. And financial services firms learned, above all, that their needs were unique: that one-size-fits-all systems would require extensive customization to fit to their businesses.
Thankfully, CRM vendors learned this too, and they have responded by developing vertical solutions tailored to the financial services industry, reflective of the industry’s unique data models and business processes. And the benefits financial services firms have seen have been compelling.
First, vertical solutions can typically be deployed faster and at a lower cost in a financial services firm than generic CRM systems. Because they already reflect data models, business processes, workflows, dashboards, reports, and features that are commonly needed by financial services firms, they require less customization and development, decreasing implementation time and costs. While integration with other systems can still require additional development, vendors who offer vertical solutions have often completed previous integrations with commonly used systems in the industry, which can reduce the development time required.
In fact, a vertical CRM vendor’s previous experience with similar firms is one of the key benefits reported by financial services firms who purchase vertical CRM. Financial services is a complex industry, and technology vendors don’t always understand its unique nuances. Some financial services firms find that they have to spend an inordinate amount of time educating vendors about how their industry operates. From the initial evaluation process through implementation and ongoing support, working with a team that understands the industry can save time and frustration, while also rewarding the financial firm with access to the cumulative knowledge of the CRM team from previous experience with financial services implementations.
Unfortunately, this also touches on a caveat for CRM buyers: there’s little to stop any vendor from slapping a vertical label on a generic product, and with the rising popularity of vertical solutions, it’s inevitable that vendors will want to ride the wave, whether or not they have the product to back it up. Financial services firms should look carefully for demonstrable industry-specific functionality and knowledge in the vendor’s product and team.
Furthermore, as anyone in the industry realizes, “financial services” is an umbrella term covering a whole range of lines of business, such as investment banking, commercial banking, and wealth management, each with its own distinct processes and needs. Many financial services firms operate across more than one of these lines of business, and they often discover that a single CRM system cannot accommodate their very different kinds of workflows and relationship structures within a single application. These firms struggle with the desire to find solutions that offer the best fit for each line of business, while minimizing silos of data and integration challenges. Where possible, the ideal solution is to find micro-vertical solutions tailored to each line of business but built on the same platform for easy integrated deployment.
A final important point is to avoid the mistake of thinking that any CRM solution, however “verticalized,” will ever be a perfect fit right out of the box. A company’s unique processes are a critical part of its competitive advantage, and in financial services, where increasing commoditization has made a stand-out customer experience an important factor in success, firms should be looking to further differentiate their relationship-centered processes, rather than to follow a cookie-cutter mold imposed by a technology. “Vertical” is no replacement for “flexible,” and financial services firms that choose a CRM system that is both tailored to their industry and malleable enough to cost-effectively mold to their unique way of doing business will find they are not only poised for a successful deployment, but to address evolving future needs.
Jason Rushforth is Global VP, Financial Services, for CDC Software’s Pivotal CRM, a leading line of customer relationship management solutions. E-mail him at jrushforth@cdcsoftware.com or visit www.pivotal.com/financialservices.
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